Farm co-op refiner gets clean-fuel revenue bonds

Diesel Fuel News, April 15, 2002 by Jack Peckham

National Cooperative Refinery Association -- one of a handful of farm co-op refiners in the U.S. -- last week won special approval for $325 million in low-interest Industrial Revenue Bonds (IRB) for the construction of new units to produce ultra-low sulfur diesel (ULSD) and "Tier 2" low-sulfur gasoline.

The McPherson (Kansas) City Council voted to approve the IRB following NCRA's pleas that it otherwise would have to shut down the 75,000 b/d refinery. Typically, the NCRA refinery produces about 50,000 barrels/day of gasoline and 15,000 b/d of diesel, along with other products.

NCRA earlier obtained a special "hardship delay" from EPA that pushed back its Tier 2 low-sulfur gasoline compliance deadline. Now, with IRB approval, NCRA expects that its McPherson plant should be "in full compliance with government regulations by June 1, 2006." That's the normal EPA deadline for ULSD production, tied to a delayed deadline for Tier 2 gasoline "hardship" cases.

The project includes "construction of a new hydrogen production facility, a UOP-designed mild hydrocracker and modifications to virtually every other unit in the refinery," NCRA said. Prior to this project, the co-op built a distillate hydrotreater in 1993.